16 Oct 2014

Deloitte, the global professional services and consulting firm, has released the results of its 2014 CFO Survey for Botswana, the second such report on the thinking of financial stewards in one of Southern Africa’s most stable and robust economies.

According to Deloitte Botswana managing partner, Mr Max Marinelli, this year 34 CFOs and financial directors participated in the Botswana survey with financial services (32 per cent), construction (15 per cent) and mining (12 per cent) accounting for the majority of respondents. 

He indicated that, majority (62 per cent) of Botswana’s CFO respondents represent companies with annual turnovers of less than USD25 million with a further 21 per cent hailing from entities with turnovers of between USD25 million and USD50 million. 

“This survey gives us a better understanding into the underlying mood of Botswana’s CFOs and helps us ascertain what the underlying drivers are that are shaping their behaviour and strategic choices,” said Max Marinelli, Deloitte Country Manager and Partner. 

“Deloitte conducts CFO surveys across the world each year and our Botswana report is a highly anticipated regional contributor to these efforts”, he said.

He indicated that Deloitte’s 2014 Botswana CFO Survey was conducted against a background of prevailing economic pessimism across Southern Africa, largely driven by the general feeling of uncertainty in South Africa, the continent’s second biggest economy.

Mr Marinelli said respondents from Botswana indicated that their companies favoured expanding within their region rather than other parts of the continent and of those looking to expand into new markets in the rest of Africa, 29% favoured Southern Africa while only 6% indicated a desire to expand in East and West Africa.

He indicated that the bulk of Botswana’s CFOs predicted only slight improvements in company performance this year as well as 2015 and 2016. 

Moreover, while 24% predict significant improvement in 2014 this figure moderates to just 9% in 2015. Worryingly, 3% of Botswana’s CFOs expect significant deterioration this year and a further 6% predict the same outcome for 2015. 

The majority of Botswana’s CFOs favour deploying cash to improve existing operations. No less than 62% of respondents rank this among their top three cash flow priorities for this year, slightly higher than the 59% who said the same thing in 2013.

He said that, CFOs in Botswana are also very concerned about competition in their local market with 60% ranking this among their top three industry concerns. Regulation was identified by 21% of respondents as their most pressing industry worry with a further 18% ranking it second and 9% naming it as the third most important concern.

He indicated that no less than 47% of Botswana’s CFOs rated margin deterioration due to lack of pricing flexibility as a “significant” risk factor to their businesses this year followed by the fragile state of the global economy (39%), the impact of power price increases (38%) and currency volatility (29%). 

A further 24% ranked margin deterioration due to input costs pressures as a significant risk, highlighting the tide of inflationary pressure that is adding to profitability concerns.

“Deloitte’s 2014 Botswana CFO report is a treasure trove of information for those looking to gain a deeper understanding of the thinking of the country’s financial leaders,” said Max Marinelli. 

“We are proud to present our second ever CFO survey of the country and look forward to adding to its wealth of insight in the years ahead,” he concluded. ENDS